This month has some exciting things in store for Brisbane. No, we’re not talking about The Royal Queensland Show – locally known as the Ekka (though we are excited about this too) – but the launch of the 12th season of The Block! So, we thought now would be a great time to get started with some genuine advice – rather than the stuff you see and hear on reality TV, which, despite its name, is not always realistic…
Welcome to Red & Co’s renovation and improvements month, where for the entire month of August we will be focusing on ways you can improve residential property either through cosmetic renovations, renovating for cash flow, renovating for profit or the biggest renovation of all – property development!
We will be chatting to industry experts and veterans, from the architects who design renovations, to the builders who bring designs to life and then finally the real estate agents who sell the finished product – you will get an end to end overview and some terrific ideas along the way.
Let’s start at the beginning: Why renovate?
Great question! Renovation can range from things as simple as a quick repair or a lick of paint to adding extra rooms, moving a few walls or completely tearing down a property and building a few units! A Roy Morgan survey completed in late 2011 found that over 8 million Australians renovated or redecorated their properties in that year. The good news is there’s lots of information out there to help put together ideas on what to do, and how to get the most bang for your buck; but if you are asking the question ‘Why bother Renovating?’, here are a few simple reasons to consider:
- You want to avoid moving at all costs
I. Hate. Moving. I just hate moving so much, so very much. Everything about it is terrible, having to pack up your belongings into small boxes, transport them and, worst of all, unpack them. Aside from having an unfettered hatred towards moving, there are also some financial aspects to consider. Don’t forget: if you sell your property to buy a new one, you would need to pay legal fees, real estate agents commissions, stamp duty and a bunch of other expenses that wouldn’t apply if you stay put.
- You want to maximise the returns on your investment property
If you think ‘renos = profit’, have you ever thought that maybe ‘renos = higher rent’? Renovations that maximise rental returns would be focused towards the needs of the tenant, rather than the end vendor that would buy your property. Clearly, this would be a different style of improvement – maybe an extra bedroom or granny flat – but still would have the desired outcome of putting more money into your pocket.
- You want to increase your properties value, and sell it for more
On the other end of the spectrum, you are renovating to increase your property’s value, which would ultimately mean the renovations are targeted towards someone that would be buying your property and therefore pay more for the improvements you’ve done. A beautifully designed and well executed renovation could significantly add value to your property, and could help improve the value in a good or bad property market.
The danger with these types of renovations is always over capitalising, or spending too much on items that ultimately don’t add an extra value. So you need to make sure you have done thorough research and have a good understanding of your end market.
- You want to make it rain: Detonate and Develop
Lately there has been a rise in the most extreme type of makeover, which can be the most profitable and equally the most risky – property development. You may own a property in a location that has been recently rezoned, in Brisbane the latest city plan has seen some medium density residential get rezoned from 2 to 3 stories which allows the opportunity for in-fill housing and smaller lot sizes. The largest challenges in developing property are: a) Having the Cash to get the development done, or b) Having the cash flow to support any lending you receive to develop your property. We are going to cover this further in the 4th week of this month, with lots of tips and tricks from highly experienced and successful property developers.
- Ok cool, this sounds easy I’m sure there aren’t any risks involved?
Did you know in the 2015 financial year Queensland homeowners alone spent $1.18 billion renovating and sprucing up their homes? With the greater Brisbane area accounting for half of that spend with over $680 million in renovations – and given the seemingly bottomless sums of money that can be spent on improving properties it is worth taking time to consider the risks and mistakes people have made before you. Keep an eye out for our feature later in this week covering – Renovation Reality TV is all Wrong: The reality of renovations & 10 worst mistakes – to avoid making the mistakes yourself.
We’re really looking forward to this month, and we hope you are too. Make sure you check us out on our Facebook and Instagram, and make sure you give us some feedback if there are any particular topics you want covered.